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accordingly, the income tax and accounting consequences of any stock-based compensation award should be determined based on the speci c terms of the award and the authoritative accounting literature and the tax laws and rulings in effect at the time of the award State and local income tax consequences of stock-based compensation awards are not addressed in this section; such consequences should be determined pursuant to the tax laws of the applicable state and local governments Finally, the exhibits ignore any employer withholding tax requirements; however, an employer should institute measures to ensure compliance with any requirements to withhold income taxes from recipients of awards Failure to comply with applicable withholding requirements could jeopardize the employer s right to a tax deduction with respect to an award The discussion and exhibits address the accounting and income tax consequences of a xed award, a variable award, and a formula award, as follows: Fixed Award Nonstatutory stock option (nondiscounted) Variable Award SAR Variable Award Performance stock option Book Value or Formula Award Book value share (a) FIXED AWARD (i) De nition A nonstatutory stock option is an employee stock option that does not qualify for the special tax treatment afforded incentive stock options under Internal Revenue Code (IRC) Section 422A, or the special tax treatment afforded stock options issued under employee stock purchase plans under IRC Section 423 A nonstatutory stock option (nondiscounted) entitles an employee to purchase shares of the employer s capital stock for an amount equal to the fair market value of the shares as of the grant date The employee s right is nontransferable and normally vests over a speci ed period (eg, three to ve years) although, in some instances, the right is vested at the date of grant The right to exercise the option expires after a speci ed period of time (eg, 10 years) (ii) Accounting by Employer for Compensation Expense A nonstatutory stock option (nondiscounted) is a xed award (ie, both the number of shares the employee is entitled to receive and the option price are known at the date of grant) However, for nancial reporting purposes, there is no compensation expense associated with such an award, since the option exercise price is equal to the fair market value of the employer s capital stock at the date of grant (iii) Accounting by Employer for Federal Income Taxes Upon exercise by an employee of a nonstatutory stock option, the employer is entitled to an income tax deduction for compensation expense, based on the difference between the option exercise price and the fair market value of the shares acquired through exercise, determined as of the exercise date (Note: If the employee quali es as an insider pursuant to the Securities Exchange Act of 1934, the computation of the tax deduction may differ) Thus, a difference usually arises between the amount of compensation expense recognized for nancial reporting purposes and the amount of compensation expense that is deductible for income tax purposes Any reduction of income taxes payable resulting from an excess of compensation expense deducted for income tax purposes over compensation expense recognized for nancial reporting purposes should be credited to paid-in capital in the period of the reduction (iv) Accounting by Employer for Earnings per Share A reduction of diluted earnings per share occurs as a result of the incremental number of common shares of the employer s stock deemed to be outstanding as a result of such awards if the award is dilutive The incremental number of outstanding shares, if any, is computed using the treasury stock method in accordance with FASB Statement No 128 (v) Illustration of a Fixed Award Exhibit 93 demonstrates the accounting and earnings per share consequences of a hypothetical nonstatutory stock option award (nondiscounted). vb.net pdfwriter.getinstance PDF Writer VB.NET Sample - Black Ice Software export to pdf in mvc 4 razor PDF Writer VB.NET Sample. 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